Insulin resistance and non-insulin-dependent diabetes mellitus are major causes of morbidity and mortality in industrialized nations. Despite the alarming rise in the prevalence of this disorder, the initial molecular events that promote insulin resistance remain unclear. The data presented here demonstrate that LG100754, an antidiabetic RXR ligand, defines a novel type of nuclear receptor agonist. Surprisingly, LG100754 has minimal intrinsic transcriptional activity, instead it enhances the potency of proliferator-activated receptor (PPAR) gamma-retinoid X receptor heterodimers for PPARgamma ligands. The ability of LG100754 to both increase PPARgamma sensitivity and relieve insulin resistance implies that a deficiency in endogenous PPARgamma ligands may represent an early step in the development of insulin resistance.